Bank to also offer online submission and tracking of applications from MSMEs
In a major new initiative, IDBI Bank has entered into an MoU with US-headquartered World Resources Institute (WRI), one of the world’s top environmental research institutes. WRI has a global reach, working with more than 400 partners in 50 countries. IDBI Bank has entered into an MoU with WRI for financing Micro, Small & Medium enterprises (MSMEs) in India for implementing ESCO (Energy Saving Company) projects. Broadly, the issues that are focused upon by WRI, inter-alia, include climate change, ecosystem protection, environmental governance, green markets, sustainable transportation, etc.
Elaborating on this new tie-up, Shri T.R. Bajalia, Executive Director and Head-MSME at IDBI Bank, said, “The MoU with WRI envisages IDBI Bank as the official partner / financier which would enable the Bank to develop financial products to meet the needs of ESCO projects, besides implementing the ESCO projects in select MSMEs who have potential for energy savings in their units. As WRI has analysed the investment potential of the ESCO industry in India, this tie-up would go a long way in helping both partners to grow in this niche segment.”
In another new initiative, IDBI Bank has introduced a ‘SME Smart Line of Credit’ which offers a pre-approved line of credit that would be available to both new and existing MSME customers in the form of Term Loan / Working Capital or both (fund-based / non-fund based limit) to meet their unexpected or sudden business needs. The business under the product would also help the Bank to achieve its priority sector-lending targets.
With a view to provide door step banking services to MSME borrowers, the Bank has introduced the facility of online application form on its website. Under this, the prospective customer can apply for various credit facilities from anywhere in the country, which would help him to save his time and money. On receipt of application, the Bank's nearest branch would contact the customer for relevant documents and the application would be processed as per the merits of the case. The Bank has also put in place a web-based application for the entrepreneurs/ MSME borrowers to enable them to track the status of their applications submitted to the Bank online. The system, among the first of its kind in the banking industry, would usher in transparency in the processing of loan applications, enabling the borrower to know the stage of processing of the loan application.
On October 1, 2010, IDBI Bank had entered into a special partnership with the Small Industries Development Bank of India (SIDBI) for joint financing of MSME clients across the country. Initially, the co-financing facility would be rolled out in 10 centres viz., Ahmedabad, Bangalore, Chennai, Coimbatore, Delhi, Indore, Jaipur, Lucknow, Ludhiana and Rajkot and subsequently, would be extended across the country. Common documentation would be done under pari passu basis, which would facilitate MSME clients to get funds smoothly. IDBI Bank would provide the working capital and SIDBI would provide the term loan.
IDBI Bank has been taking a number of such initiatives in MSME financing during the last few years. In recognition of these, IDBI Bank has received the Best Public Sector Bank award in “SME Financing” from global business information provider Dun & Bradstreet (D&B) for FY 2010.